FATCA – Correction to regulations concerning a 2014 reporting date for “participating FFIs”

November 17:  The Treasury Department and IRS today released for publication in the Federal Register a correction to a package of final and temporary regulations (T.D. 9657) issued previously in 2014 to harmonize the information reporting and withholding rules under chapters 3 and 61 of the Code to the regulations under the Foreign Account Tax Compliance Act (FATCA).

Reason for correction

The preamble to today’s correction [PDF 195 KB] reports that this item is being released to correct rules that affect foreign financial institutions (FFIs) that have entered into an agreement with the IRS to be treated as a “participating FFI” and to report certain information with respect to U.S. accounts that they maintain.

The correction preamble explains that the prior 2014 temporary regulations contained an error that is misleading with respect to the reporting requirements of participating FFIs maintaining U.S. accounts during the 2014 calendar year. This correcting amendment modifies the last date in the first sentence in Reg. section 1.1471-4T(d)(7)(iv)(B) to correct the relevant provision to meet its intended purpose.

Specifically, this correction provides:

With respect to the 2014 calendar year, a participating FFI must report under paragraph (d)(3) or (5) of this section on all accounts that are identified and documented under paragraph (c) of this section as U.S. accounts or accounts held by owner-documented FFIs as of December 31, 2014, (or as of the date an account is closed if the account is closed prior to December 31, 2014) if such account was outstanding on or after the effective date of the participating FFI’s FFI agreement.